Did you know that by increasing customer retention, you can dramatically increase revenue, too?
But what exactly is customer retention, and how do you improve it?
Customer retention is a strategy for getting more of your customers to remain loyal to your brand and business over time.
A successful retention strategy turns one-time shoppers into loyal, repeat customers who spend more, frequently make purchases, and refer their friends.
A customer retention strategy boosts your profitability while encouraging repeat business to drive a sustainable, long-term business model.
CRM and Customer Retention
In this guide, we'll review some tools and strategies that you can implement to retain customers — this includes the ways you can use a customer relationship management tool (CRM) to bond your sales and customer service teams for mutually beneficial results.
Customer Retention Tools
- Customer Loyalty Program
- Personalization Tool
- Customer Service and Support Software
- Customer Feedback Tool
A CRM is a system that can help you manage all of your customer relationships. You may be wondering, "Is there really a relationship between a CRM and customer retention?"
The answer is yes.
Using a CRM for Customer Retention
By tracking, optimizing, and personalizing the customer experience (meaning, every interaction they have with your business), you can improve the buyer's journey, your sales process, customer support, marketing efforts, and customer satisfaction — all of which directly contribute to your ability to retain customers. And a CRM can help you accomplish all of this across the entire business, not just within your sales org.
In fact, a CRM platform like HubSpot — which offers plans that are ideal for SMBs and enterprise businesses — includes powerful sales, marketing, service, and CMS tools plus a complete library of available integrations that can be used to help you consistently offer a delightful customer experience at every touchpoint.
Below is an example of HubSpot in action as a customer retention tool.
CRM System: HubSpot CRM Platform
No matter if you're a startup, mid-size, or enterprise company, here's an example of how any business can use HubSpot's all-in-one CRM platform to improve customer retention.
To start, personalized and highly-relevant marketing content fosters brand awareness and attracts members of your target audience so some of those people convert on a CTA, blog post, email signup, etc. Marketing Hub is a marketing automation software that helps your team do just that — attract the ideal audience members, convert those people, and run complete, personalized, and inbound marketing campaigns at scale.
Then, in Sales Hub, sales reps have the information they need to reach out to those leads and pitch your product while also acquiring relevant contact and buyer information as they nurture prospects through the buyer's journey. And that acquired contact data will be automatically entered and organized in the CRM after every interaction to save reps time.
Set automated sales follow-ups and reminders, use email templates and email tracking, record and track calls, and a use number of pipeline-specific and reporting features to deepen relationships with prospects and build a sense of trust — another tactic for retaining customers.
Lastly, onto the customer service and support features of the CRM that will contribute to customer retainment.
When a customer comes to the team with a question about a product, a service rep can quickly pull up their profile and view every interaction they've had with your business to date for context (e.g. which product they own, how long they've been a customer, how often they buy from you, notes taken by sales or service team members). Every new interaction with customer service will be recorded in the CRM as well.
Additionally, Service Hub makes it easy to automate manual service tasks, offer self-service options for customers who want immediate answers, provide live chat and chatbot support, improve team-wide collaboration and communication, and obtain feedback directly from customers.
This allows reps to capitalize on opportunities to upsell and cross-sell, identify customers who are at risk of churn, and understand the customer experience and buyer's journey to determine what should be improved and what should stay the same.
(Also, if you're a marketer, developer, or IT specialist, CMS Hub is a content management software and website builder that's easy to use and customizable.)
2. Customer Loyalty Program
A customer loyalty program is an easy way to boost customer retention. When a customer is given additional value for doing business with you — by way of a points system or a VIP rewards program, for example — it becomes more difficult for them to choose a competitor over you.
Additionally, loyalty programs allow you to reward more than just loyalty. You can reward customers for fulfilling other profitable actions like writing reviews, sending referrals to friends, and social sharing.
Customer Loyalty System: Yotpo Loyalty and Rewards
Yotpo is a loyalty, rewards, and referrals tool — its purpose is to help you attract new and existing customers with customized and on-brand loyalty and rewards programs.
The tool makes it easy to personalize rewards for customers who complete actions that make a positive impact on your business — there are pre-built campaigns that exist within the tool to help expedite this process. You can also set up a tier-based loyalty program based on tiers factors of your choice such as points, amount of money spent, types of purchases, and referrals.
Set incentives for repeat referrals and select from a variety of options for those incentives such as points, products, samples, discount codes, store credit, and more. Lastly, there are program analytics for all of your loyalty and rewards efforts so you can track what's working best among new and existing customers.
The application of game mechanics is not just for mobile apps and video games. You can harness the power of gamification to improve the customer experience and buyer's journey.
With gamification, you can encourage users and customers to complete preferred actions (e.g. convert, make another purchase, refer their friends, sign up for your email newsletter, follow you on social media, etc.) by making it more enjoyable for them to do so.
Sites that incorporate gamification accomplish this by having leaderboards, statuses, quizzes, badges, and rewards so shoppers can showcase where they stand relative to others and/ or continually benefit from their loyalty to your brand.
Note: Gamification is an even more effective customer retention tool when paired with or incorporated naturally into other aspects of your retention strategy such as your loyalty program.
Gamification System: Mambo.io
Mambo.io is an enterprise engagement and gamification software that can be tailored to your customers, employees, or both. For the purpose of this post, we'll talk about what Mambo.io can do for your customers in terms of increasing loyalty and retention — specifically, how you can create a custom gamification system for customers.
Reward customers who have an impact on new customer recommendations and repeat purchases. There are ways to use Mambo.io's gamification features to engage your casual website visitors and effectively convert them, too — and ultimately, turn them into loyal customers. And speaking of loyalty, there are reward-based loyalty programs you can create and offer on your website using Mambo.io in order to encourage your customers to come back to make more purchases.
4. Personalization Tool
Personalization allows you to increase customer retention through relevant and customized experiences with your brand. It requires you to collect data about your customers that you can later use to make recommendations and tailor promotions to each customer's individual needs.
Personalization makes customers feel as though they're interacting with a small business that has the time to get to know them, remember them, and care about them as individuals — even if you're an enterprise company.
There are so many touch points that you can personalize throughout the buyer's journey to improve customer retention — one of the simplest and most common is email. To personalize emails you may:
- Address the person by name and/ or title.
- Reference the level or type of customer they are.
- Provide context around your prior interaction(s) with them.
- Automate follow-ups (with Sequences) so messages are sent after specific criteria are met or when the customer is already engaged.
- Personalize content based on any of the contact values in your CRM.
- Provide relevant knowledge base articles or blog articles based on their most recent purchase.
Note: With HubSpot, you can automate email personalization, too.
Personalization System: HubSpot Marketing Hub
Marketing Hub is a marketing automation platform for small to enterprise-size businesses — it integrates seamlessly with your CRM and helps you create end-to-end, personalized experiences for your customers.
Personalize all interactions across the customer experience — such as marketing campaigns — for each of your leads and customers to attract and convert those people at scale. Personalize emails and the content within those emails for each recipient to improve clickthrough rates, lead nurturing, and scoring as well.
5. Customer Service and Support Software
Customer service and support software makes the process of providing memorable and delightful experiences easier. As a result, customer satisfaction improves — and so do customer retention and loyalty.
Customer service and support software may include tools like a help desk, knowledge base, live chat, chatbot, ticketing, and a conversation inbox. All of these features allow you to resolve customer issues and conflicts efficiently and collaborate internally with ease.
Customer Service and Support System: HubSpot Service Hub
Service Hub makes it easy to offer customer service and support that delights your customers and keeps them loyal to your company. Service Hub comes with conversational tools to make communication with customers and reps easy.
The software has other features including help desk automation, a knowledge base, customizable reports, and customer feedback tools (including surveys). These features all serve as effective ways to efficiently serve your customers as well as determine what about the customer experience is delightful and what needs to be improved.
Additionally, Service Hub integrates seamlessly with the HubSpot CRM platform to give your service team — and business as a whole — a unified view of each customer interaction.
All of these features contribute to your reps' ability to deepen relationships with customers, build a sense of trust, personalize support, and obtain feedback to improve the customer experience and retention for the long haul.
6. Customer Feedback Tool
A customer feedback tool is more than just a way to survey your customers. It’s an opportunity to start a conversation with people who have a strong opinion of your business. This can prevent churn among customers who’ve recently had a negative experience with your company. After all, if they’ve gone through the effort of leaving a review, they’ll likely be interested in hearing from your customer service team.
Even positive reviews present timely opportunities to delight customers. For instance, if a customer leaves positive feedback, send them a thank you letter. This is a great way to go above-and-beyond for your customers and show them you really care about their business. As a result, you'll be more likely to retain that customer.
Customer Feedback System: HubSpot Customer Feedback Software
HubSpot's Customer Feedback Software helps you understand your customers on an individual level so you can effectively identify areas for growth. Easily send surveys to customers to get qualitative and quantitative feedback from your customers. You can send these surveys directly to recipients via email so they can access and respond to them quickly.
HubSpot will also help you increase feedback response rates by recommending which type of survey you should deploy (NPS, customer effort score, or customer satisfaction) based on your unique goals. This will also help you determine how happy your customers are with your business at different points throughout the buyer's journey.
The tool tracks all customer feedback on a dashboard so you have access to visualizations and reports for your data in one place — and once new feedback comes in, your dashboard will automatically be updated for you.
Retain Customers to Grow Better
Customer retention is the key to business growth. It's not enough to simply attract leads with compelling content or to close new customers with a great deal.
To stand out in increasingly competitive verticals, businesses need to retain customers by helping them be successful and by delighting them so they keep returning to conduct more business with you, refer their friends, and ultimately, become brand evangelists.
Editor's note: This post was originally published in October 2017 and has been updated for comprehensiveness.